Some may think of student loan debt as only being a young person’s problem. But that’s not necessarily the case; many people of all different ages have taken out loans for college. Right now student loan debt among seniors is not as widespread like those in their twenties. However, the senior citizen population with student debt is growing quickly and much faster than other age groups.
Seniors take on debt for a variety of reasons, but a large amount of it is for their own education. Many are going back to school later in life, but are then unable to find jobs that allows them to pay off their student debt before they hit their retirement years.
What are my options?
Try to find a repayment plan that works for you instead of putting it off for another day. One such lesson is that if you put off repaying a loan, you’re creating a bigger mountain of debt in retirement thanks to compound interest and fees.
Income driven repayment plans can offer forgiveness, but there is a tax liability involved with that. Does it make sense to go from owing student loans to owing income taxes? Determine the best repayment option for your income and life situation while keeping in mind how many years you plan to work. Visit Student Loan Borrower Assistance.org for more info on payment plan options.
What if I miss a payment?
Should you find yourself behind on your payments, don’t avoid it. Keep in contact with your loan servicer and get help from LSS to learn all of your options. Note: your social security income is not exempt from collection of federal student loans. They can (and do) garnish up to 15% of a persons’ benefits. Don’t worry though…they have to leave you $750 to live on. Can you imagine trying to cover your expenses on $750 each month? This number was set in 1996 and has never increased.
Navigating student loans can be tricky, but the worst thing you can do is avoid the situation.
The good news is that LSS offers FREE student loan counseling! We can help you review your student loans and repayment options. With this information you will be able to make the best decision on what action to take next. Not to mention, finances aren’t in a bubble. Many people are juggling other kinds of financial issues like credit cards or not having an emergency savings account. We can help with that along with your student loans. Give us a call today at 888.577.2227 for your free and confidential session. Or click below to get started online.
Author Katie Eastman is a Certified Financial Counselor with LSS and she specializes in budget, credit, and debt counseling.